Mr. COHEN Can I ask you a question as to whether you ever suspected that Oliver North was taking instructions not from you, but from the DCI?

Mr. McFARLANE: Yes, sir.

Mr. COHEN Would you explain, please?

Mr. McFARLANE: I probably shouldn't say that. I became aware in the fall of 1985 that Ollie had more contact than I had realized with the Director and he mentioned, and I think it was entirely offhand and intended comically at one point to say that the Director had volunteered a million dollars. And he laughed. And I think it probably was comic. But it was expressive of a relationship that surprised me.

Mr. COHEN Did you come to believe that perhaps Mr. Casey was giving him instructions in how to conduct this particular operation with respect to either Nicaragua or Iran?

Mr. McFARLANE: Senator Cohen, I think so.

Mr. COHEN In fact, we have evidence that Colonel North was calling the chief of station in a Central American Country and having him report to Colonel North. We have an ambassador being called in Lebanon, having him report to Colonel North. It is rather clear that Oliver North was acting under the-at least the aegis of Director Casey during this time?

Mr. McFARLANE: Yes, sir.